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On Tuesday November 23, 2010, 6:47 pm EST
Insider-trading probe wades
into legal gray area
NEW YORK (AP) -- Mutual
fund company Janus Capital Group said it was cooperating with an inquiry on
insider trading a day after the FBI searched the offices of three hedge funds
in New York, Connecticut and Massachusetts as part of what outside experts say
could turn out to be one of the largest probes in Wall Street history.
The aggressive push federal
prosecutors are making against potential insider trading is sending
investigators into a legal gray area that may redefine insider trading itself.
Investigators are thought to be pursuing suspicions of trading by hedge funds
and mutual funds that might have profited by illegally using inside information
not available to ordinary investors.
3 big developments make
AIDS outlook more hopeful
In the nearly 30 years the
AIDS epidemic has raged, there has never been a more hopeful day than this.
Three striking developments
took place Tuesday: U.N. officials said new HIV cases are dropping dramatically
worldwide. A global study showed that a daily pill, Gilead Sciences Inc.'s
Truvada, that is already on pharmacy shelves could help prevent new infections
in gay men. And the pope opened the way for the use of condoms to prevent AIDS.
Economy sees growth, but
unemployment stays high
WASHINGTON (AP) -- The
economy grew a little faster over the summer than the government first thought.
That modest pickup wasn't nearly enough to significantly lower the nation's
high unemployment rate, and the Federal Reserve doesn't expect the economy to
improve much over the next couple of years.
The economy expanded at a
2.5 percent annual rate in the July-September quarter, the Commerce Department
reported Tuesday. That was up from the 2 percent pace initially estimated, and
better than the 1.7 percent growth rate in the April-June quarter.
The Fed predicts roughly
2.5 percent growth and between 9.5 percent and 9.7 percent unemployment for the
rest of this year. Those are both downgraded forecasts from its June
projections.
Growth will strengthen over
the next three years, but not enough to bring unemployment back down to more
normal levels of around 5.5 percent to 6 percent, according to the Fed's
forecasts.
Korean conflict, European
worries weigh on stocks
NEW YORK (AP) -- Stocks
fell Tuesday as a flare-up of tensions between North and South Korea combined
with downbeat news on the economy gave investors plenty of reasons to sell
ahead of the Thanksgiving holiday. The dollar and gold rose as investors sought
safe places to park money.
North Korea and South Korea
exchanged artillery fire, killing at least two South Korean marines. That came
as investors were already concerned that a bailout of Ireland may not be enough
to contain Europe's debt crisis. Borrowing costs for Portugal and Spain rose,
leading Spain to trim the size of a debt sale.
In the U.S., sales of
previously owned houses dipped 2.2 percent in October. Also, Federal Reserve
officials became more pessimistic and lowered their outlook for economic growth
for the next year.
41 states see job gains in
Oct., most in 5 months
WASHINGTON (AP) --
Businesses and other employers added jobs in 41 states in October, the best
showing in five months, the Labor Department said Tuesday.
The figures indicate the
job market is picking up a bit in most parts of the country. Even the nation's
hardest hit states -- Nevada and Michigan -- showed declines in their
unemployment rates.
But the gains weren't
enough to broadly reduce unemployment rates. The Labor Department said the
jobless rate fell last month in 19 states, remained the same in 17 and rose in
14. Unemployment can rise when jobs are created if more people begin searching
for work.
Portugal, Spain become
market target after Ireland
LISBON, Portugal (AP) --
Europe's efforts to contain its debt crisis came under increasing strain
Tuesday as bond market jitters shook Portugal and Spain, seen as the 16-nation
eurozone's next weakest links now that Ireland has followed Greece by accepting
a massive international rescue.
The nations' borrowing
costs rose, suggesting investors are more worried about default, while Spain
limited the size of a bond sale because traders demanded sharply higher
premiums.
Stock traders panicked and
dumped shares across all sectors, sending Portugal's benchmark stock index down
2.2 percent by the close, while Spain's sank 3.1 percent to a level not seen
since July. The euro slid below $1.34 for the first time in two months.
Spooked by the scale of
Greece's bailout requirements in May and Ireland's banking failures,
international investors are looking much closer at the public finances of
eurozone countries and they don't like what they're seeing, particularly in
Portugal.
J. Crew makes deal to be
taken private for $3B
NEW YORK (AP) -- Preppy
fashion retailer J. Crew Group Inc. on Tuesday agreed to be taken private in a
$3 billion deal that would be the second multibillion dollar specialty retail
buyout launched in two months.
The announcement of an
offer from two investment firms -- including one that used to own J. Crew --
came as the retailer reported Tuesday that its third-quarter net income fell 14
percent, hurt by weaker women's clothing sales. The company also lowered its
guidance for the year.
Under the deal as proposed,
J. Crew shareholders would receive $43.50 per share from private equity firms
TPG Capital and Leonard Green & Partners. That is a 16 percent premium to
the stock's closing price Monday of $37.65.
Treasury gets $11.7 billion
from GM stock sale
WASHINGTON (AP) -- The
Treasury Department says it has received $11.7 billion from the sale of 358.5
million shares of General Motors stock.
Treasury announced that the
net proceeds from the GM stock sold last week were delivered on Tuesday.
Treasury officials said that the government could receive an additional $1.8
billion assuming the bankers exercise options to purchase an additional 53.8
million shares of GM common stock within 30 days of the initial stock offering.
The government put $49.5
billion into GM as part of its bailout of the giant automaker.
In addition, Treasury said
it will receive another $2.1 billion from GM when the automaker repurchases
preferred stock that was issued under the government's $700 billion Troubled
Asset Relief Program. That sale is supposed to take place in December.
Tests on toys find few
problems this season
WASHINGTON (AP) -- Only a
small fraction of children's toys tested for toxic substances and choking risks
have been found to violate federal safety regulations as holiday shopping
shifts into high gear, consumer advocates said Tuesday.
The U.S. Public Interest
Research Group credited a 2008 law that set stronger limits and standards for
children's products for helping to make many of the products on store shelves
safer for youngsters. The law was passed in the wake of a wave of recalls of
lead tainted toys.
PIRG had 260 toys and other
children's products from major retailers and dollar stores tested for toxic
substances such as lead and antimony as well as for the risk of choking
presented by small parts. Four of the items tested violated federal safety
regulations for children's toys.
By The Associated Press
The Dow Jones industrial
average fell 142.21, or 1.3 percent, to 11,036.37.
The Standard & Poor's
500 lost 17.11, or 1.4 percent, to 1,180.73. The Nasdaq composite index fell
37.07, or 1.5 percent, to 2,494.95.
Benchmark oil for January
delivery lost 49 cents to settle at $81.25 a barrel on the New York Mercantile
Exchange.
In other Nymex trading in
December contracts, heating oil gave up 1.90 cents to settle at $2.2496 a
gallon, gasoline dropped 1.77 cents to settle at $2.1342 a gallon and natural
gas fell 0.7 cent to settle at $4.264 per 1,000 cubic feet.
In London, Brent crude lost
71 cents to settle at $83.25 a barrel on the ICE Futures exchange.